Sydney, Dec 2, 2014 AEST (ABN Newswire) - East Africa focused emerging potash company South Boulder Mines (ASX:STB) (OTCMKTS:SBMSY) is on the development path at its Colluli Potash Project in southern Eritrea, East Africa, where the company's work on a pre-feasibility study is well advanced.

The Perth-based, ASX-listed company's project hosts a large, high grade potassium bearing resource close to surface, in close proximity to the Eritrean coast and geographically favourable relative to key markets.

Colluli lies in an emerging potash province, the Danakil Potash belt, which currently hosts over 4.2 billion tonnes of measured and indicated potassium salts. Danakil compares favourably in terms of size, resource depth and environmental issues against other potash belts globally.

The project itself hosts over 1 billion tonnes of potassium bearing salts including sylvite, carnallite and kainite salts which are all suitable for the production of potash fertilisers.

What makes this project unique is that it is one of only three major global deposits containing kainite salt in solid form. The fact that the salts are in solid form is a major differentiator from other projects which require potassium-rich brines to be evaporated in order to create salts.

Kainite is the most important salt used for low cost production of potassium sulphate (SOP), a premium potash product with a substantial price premium over potassium chloride (MOP).

In October, the company revealed metallurgical testing conducted at Saskatchewan Research Council laboratory had successfully resulted in the production of commercial grade SOP. The process, which essentially involves combining decomposed kainite and sylvite under ambient conditions, reduces mining strip ratio as well as the potential to cut capital and operating costs.

"The most exciting thing about the Colluli development path is that we actually lower our cost base to make a product with a substantial price premium," South Boulder Mines chief executive officer and managing director Paul Donaldson said.

"We are excited by the simplicity of the process which is effectively flotation and mixing of recovered potassium salts from the open pit.

"Taking the requisite time to get the process design right has reduced the process plant capital and demonstrated successful generation of the premium potash product, potassium sulphate (SOP)."

What also separates the company from its potassium sulphate peers is Colluli's location only 75km from the Red Sea coast, making it the closest potassium sulphate resource globally to the coast.

The company is now well advanced with its work on the pre-feasibility study which is expected to be announced in February 2015. Test work on the definitive feasibility study is running in parallel with pre-feasibility work and is expected to be completed mid-2015.

The project is held in a 50:50 joint venture with the Eritrean National Mining Company (ENAMCO). Eritrea is regarded as a stable jurisdiction with mining an important component of the country's economic development.